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Sunday, July 13, 2014

Fostering Business Growth in Cambodia

The Cambodia Herald

Published: 13-Jul-14 09:24AM | By William E. Todd

I would like to express my gratitude for everyone’s congratulatory wishes on the United States’ 238th birthday. Having recently returned from a trade mission to the United States, I am reminded of the important role played by trade and commerce in our struggle for independence and the formation of America’s national identity. From the Boston Tea Party, which protested a tax on tea, to the establishment of the World Trade Organization in the 20th century, which pushed for a reduction in tariffs, supporting trade and commerce have been important priorities. Nimol, who read about the Embassy’s press conference on the trade mission, asked “Why does America want to increase trade with Cambodia?”

America is committed to the reduction of poverty and improving the daily lives of Cambodians through many programs, including the expansion of our trade and investment ties. Our economic relationship is already significant – the United States is Cambodia’s largest export market with exports to the United States representing 18 percent of Cambodia’s gross domestic product. Encouraging greater trade and investment also eases many social and political problems. It is no coincidence that the increase in Cambodia’s gross domestic product has been accompanied by declines in poverty and increases to prosperity. As former President Ronald Reagan once said, “The freer the flow of world trade, the stronger the tides of human progress and peace among nations.”

Building on last year’s successful reverse trade mission, I recently led a second business delegation to the United States to encourage the type of bilateral trade and investment that will grow the economies of Cambodia and the United States. Accompanied by Senior Minister and Minister of Commerce Sun Chanthol, the American Chamber of Commerce Cambodia, and 20 representatives of leading Cambodian companies,we met with hundreds of U.S. business representatives and investors, discussing potential commercial opportunities and partnerships to expand trade and investment between our two countries.At events hosted by the Los Angeles Chamber of Commerce and the Trade Development Alliance of Greater Seattle, we underscored Cambodia’s pro-business environment and the potential ground floor opportunities available to U.S. businesses. At Microsoft Headquarters in Redmond, Washington, the delegation and I had an opportunity to learn what a leading technology company is doing to improve urban environments. In Washington, D.C., we discussed the benefits large American companies like Bechtel, Hanes Brands, and General Electric could bring to Cambodia.

To illustrate potential opportunities for U.S. investors and exporters considering entering the Cambodian market, we emphasized Cambodia’s openness to trade and investment, its geographic location in the heart of Southeast Asia, and its abundant natural resources. For its part, the Royal Government deserves credit for establishing many pro-business policies that have succeeded in attracting foreign investment in the past, including measures that allow 100 percent foreign ownership in most sectors, permit easy repatriation of profits, and provide favorable tax rates for new investors.

In every one of our discussions, we addressed not only opportunities but the existing challenges of doing business in Cambodia. Despite the many positive attributes of Cambodia’s commercial environment, American business representatives expressed their concerns about the existing political impasse,continuing labor problem, and corruption. We addressed each of these issues and emphasized that through meaningful reform in each and political resolution, the country could reach new heights of economic and commercial success. Similarly, we expressed our hope in recent efforts to adopt a scientific approach for setting a minimum wage, which,in conjunction with additional labor reform, could lead to Cambodia becoming a model labor environment.

Acknowledging the need for further reforms and the willingness to be a force for positive change, Minister Sun Chanthol is working to improve the business environment and address the corruption issue. Within in his own ministry, the Minister has increased the number of online services for businesses -- an important step forward in the fight against corruption that resonated with U.S. businesses. Broadening this effort to all ministries would build upon and support the government’s pro-business environment.

Our trade missions to the United States, as well as regional missions to Bangkok and Singapore, reflect America’s commitment to creating more job opportunities for Cambodian youth, expanding the country’s middle class, and supporting the country’s strong economic growth. It is my hope that by fostering connections between U.S. and Cambodian businesses, Cambodia can realize its full potential, bolstering growth and increasing prosperity for all of its citizens.

Thank you for reading my column this week on a very important issue. Please help to continue this conversation on the most pressing issues in Cambodia by sending me your questions at AskAmbToddPP@state.govand following my blog at http://blogs.usembassy.gov/todd.